verkkokauppa.com q3 2018 26.10.2018, panu porkka, ceo ... · 26.10.2018, panu porkka, ceo...
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Verkkokauppa.com Q3 201826.10.2018, Panu Porkka, CEO
STOREFRONTRETAIL IS GOING ONLINE. COME ALONG.
Questions during or after the presentation - [email protected]
TODAY´S
Agenda
• Q3/2018• 2018 outlook• Market development and trends• Key takeaways• Q&A
Verkkokauppa.com Q3 2018
Q3 revenue €117m (+11%)EBITDA* €3.7m (+77%)
Q3 dividend €0.047(Q2 2018 €0.046)
Market share gains in most categories**, up to 40% in a certain category
*) Comparable EBITDA **) Source: GfK
Verkkokauppa.com Q3 2018 Income Statement
Revenue, € million
Gross profit
Gross Margin
Personnel expenses
Other opex
EBITDA
EBITDA margin
Operating profit (EBIT)
Net profit
“Verkkokauppa.com´s year on year quarterly revenue has been growing every quarter”
*) Comparable
116.8
17.4
14.9%
-6.8
-7.0
3.7
3.2%
3.4
2.7
105.4
13.9
13.2%
-5.7
-6.1
2.1
2.0%
1.7
1.4
+11%
+25%
+19%
+15%
+77%
+96%
+91%
Q3 2018 Q3 2017 Ch %
Verkkokauppa.com Q3 2018 sales drivers
*) Source: The Finnish Ministry of Finance 14 September 2018**) Source: GfK
67.9mEURQ3/14
105.4mEURQ3/17
83.2mEURQ3/15
92.6mEURQ3/16
116.8mEURQ3/18
• Additional campaigning and marketing
• Aggressive pricing• Raisio megastore opened March 8• Retails continues going online
• Finnish economy returning to growth, GDP +3.0% 2018*
• Tough CE market** in 7-8/2018 (Market +1.9%)
• Market share gains in almost all categories
Verkkokauppa.com 30/9/2018 Balance Sheet• Inventory 52.3 (47.0) million euros on 30/9/2018, change +11.3%• Cash flow from operating activities -18.4 (-4.1) million euros• Investments 1-9/2018 was 1.0 (1.2) millions euros
• Equity ratio 38.0% (40.2%)• Cash 26.0 (29.9) million euros, no interest bearing debt.• 15 million euro revolving credit facility – not being utilized
Highlights in Q3 2018
• Larger campaign themes with wide
assortment of product categories
• Successful launch of new iPhone Xs
• Esports events in all stores
• Events in Verkkokauppa.com stores
showcasing our product diversity
(Hauvantai, Tenavatempaus)
• Outlet auctions going strong
Verkkokauppa.com 1-9/2018
Revenue, € million
Gross profit
Gross Margin
Personnel expenses
Other opex
EBITDA
EBITDA margin
Operating profit (EBIT)
”Higher revenue growth and profitability are expected for H2 2018”
*) Comparable
321.5
48.3
15.0%
-21.1
-20.6
6.8
2.1%
5.8
304.4
42.0
13.8%
-17.8
-17.1
7.1
2.3%
6.1
+5.6%
+15%
+19%
+20%
-4.9%
-5.4%
1-9/2018 1-9/2017 Ch %
Verkkokauppa.com 2018 outlook
2018 guidance revenue between €460m -€500m (2017 €432m) and comparable EBITDA €11 - €14m (2017 €13 m).
Policy of paying out growing, quarterly dividend.
Medium-term targets of net sales growth of 10-20% per year, growing EBITDA and EBITDA margin of 3-5%.
Growth drivers for H2/2018• Positive outlook on Finnish economy (GDP +3.0% 2018 *)
• Q4 CE market expected to remain tough and competitive
(7-8/2018 +1.9% **)
• Increasing market shares in existing categories
• Improvement of brand marketing, media mix and added campaigning
• Fourth megastore in Raisio contributing in sales growth
• Improvement of omnichannel and instore experience
*) Source: The Finnish Ministry of Finance 14 September 2018**) Source: GfK
Verkkokauppa.com´s targets and categories
Continuous and systematic expansion into new categories that are fully suitable for low-cost online model and efficient logistics.
• Target to be Top 3 e-tailer in each category in Finland
• New categories are planned for 2019• “Probably always cheaper” price in each category
• Proven business model to support future growth• Renewed strategy to support growth in the future
Verkkokauppa.com´s gross margin and fixed costs
Q2 2017 (sales +24 %) Q3 2017 (sales +14 %) Q4 2017 (sales +10 %) Verkkokauppa.com 2017 (sales 16%)
13.8% 11.3%
2.5% 2.6%
11.9%14.5% 13.2%
2.0%
11.2% 11.3%
16.0%
4.7%
14.4%
3.0%
11.4%
14.3%
3.2%
13.6% 13.7% 11.7%
Q1 2018 (sales +2.5 %) Q2 2018 (sales +3.2 %) Q3 2018 (sales +11 %)
0.7%
20%
15%
10%
5%
0%
20%
15%
10%
5%
0%
15.9% 14.9%
2.3%
Q1 2017 (sales +20 %)
Grossmargin%Fixedcosts%EBITDA
Verkkokauppa.com´s business model with lower fixed costs
”The company aims to improve its EBITDA margin in the medium-term byincreasing share of higher margin categories and private labels in the sales mix and
the increasing the share of the Apuraha financing services. ”Sources: Statistics Finland, Soliditet and D&B. Gross margin includes changesin the inventory and outside services. EBITDA excluding non-recurring items.
RetailinFinland(w/ocars)2016(total€37b)
Verk.com Q32018(sales+11%)
Verk.com 2017(sales +16%)
Gigantti2017/2018(sales +6%)
PowerFinland2017(prev.Expert,sales+24%)
AmazonEUSARL2016(€22c,sales+16%)
30.3%
27.5%
14.9%
11.7%
14.4%
11.4%
20.9% 20.6% 20.6%18.9%
25.0%25.9%
Grossmargin%Fixedcosts%
20%
25%
30%
35%
15%
10%
5%
0%
Global online share forecast 2015-2021*
7,4 %
8,6 %
10,2 %
11,9 %
13,7 %
15,5 %
17,5 %
6%
8%
10%
12%
14%
16%
18%
20%
2015 2016 2017 2018* 2019* 2020* 2021*
E-commerce share of total global retail sales from 2015 to 2021
Source: eMarketer; Website (retailtechnews.com) © Statista 2018 *) Forecast. Includes products or services ordered using the internet via any device, regardless of the method of payment or fulfillment; excludes travel and event tickets.**) Source: The Finnish Ministry of Finance 14 September 2018
Verkkokauppa.com aims to take large part of retail (~€40b) going
online (1%/a) in Finland
2016 Retail e-commerce shares: Finland 10%,UK 17%, USA 14%,
Germany 14%(source: CRR)
Finnish economyreturned to growth,
GDP +3.0 % in 2018**
Mobile users are growing
Source: Paytrail 2018
50% 46% 51%
38% 31%
21%
0%
10%
20%
30%
40%
50%
60%
15-24 years 25-34 years 35-44 years 45-54 years 55-65 years 66-75 years
Yes, i have bought online using mobile device in the last
”40 % of Finnish have used mobile device for online shopping during the last three months. ”
Web visits last 12 months(desktop and mobile)
Key takeaways
• Revenue growth in Q3 +11% inline with company guidance
• Aggressive market share growth in a competitive market
• Raisio megastore contributing in sales growth
• Growth in H2 significantly higher than H1
• Main focus is growth also for the future
RETAIL IS GOING ONLINE. COME ALONG.
Thank you and Q&AUpcoming events:• Q4/2018, Friday 15 February 2019 • Q1/2019, Friday 10 May 2019• Q2/2019, Friday 9 August 2019• Q3/2019, Friday 25 October 2019
Links:• Investors site - www.verkinvest.com• Company Releases mailing list - www.joinverk.com• Company Investor Webcasts - www.verklive.com
Contacts:• Panu Porkka, CEO [email protected]• Jussi Tallgren, CFO, [email protected]• [email protected]
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